Monday, 9 September 2013

HS2: PAC grandstanding obscures welcome scrutiny

The Nürnberg - Ingolstadt high speed line opened in 2006, as part of the phased construction of a high speed corridor between Berlin and Munich. Photo: S Telforth
In 1991, the German government unveiled a series of ‘national unity’ projects intended to stitch the country back together in the wake of the fall of the former DDR. Among them was a plan to link the re-crowned capital, Berlin, with Munich, economic powerhouse of the Land of Bavaria, by high speed railway. The ‘strategic case’? To ensure that the two cities shall be no more than 4 h apart by rail [1].

But what followed was not entirely a story of fabled Teutonic efficiency. Indeed, local opposition to new railway construction of any sort in Germany is usually vociferous, largely owing to concerns about the noise of freight trains. So it proved with the Berlin – Munich project, which proceeded piecemeal and narrowly survived cancellation on several occasions. Today, around 230 km is still under construction, requiring huge tunnelling efforts through the Thüringer Wald between Halle and Ebensfeld, north of Nürnberg. Completion of the corridor is not expected until the end of 2017 at the earliest, more than 25 years on from the first proposal.

But the continued backing of the federal government for such a locally-controversial programme offers an interesting insight into the ongoing debate over High Speed 2 in the UK. Connecting two of Germany’s most significant cities by international-class transport infrastructure is seen as an economic good in its own right; there was, as far as I can tell, no florid talk of ‘bringing Munich closer to Berlin’, or of ‘rebalancing’, and no pin-head procrastination about how much German business people work on trains.

Which brings us to more sub-tabloid hectoring from Margaret Hodge, the chair of the Public Accounts Committee, whose latest report into the preparations for the HS2 programme has just been issued. To be abundantly clear, this blog is not going to attempt to rebut the measured and valid questions raised by the National Audit Office and the related PAC report, which rightly scrutinises the Department for Transport and HS2 Ltd’s resources and their ability to navigate the project through the tricky Hybrid Bill process.

Especially important is the PAC report’s analysis of the significant contingency applied to HS2 in the current cost estimates, where PAC recommends that DfT ‘should allocate its allowance to specific risks to the programme’. The report also highlights issues of parliamentary timetabling, and DfT’s own resourcing and staffing levels. The latter matters acutely, since DfT and HS2 Ltd are required by the nature of the project to manage a raft of global engineering consultancies which are responsible for the basic design of the railway. If such designs prove to be over-ambitious (as they seemingly were for the first draft rebuild of London Euston), it is HS2 Ltd and DfT, not the consultancy, which gets it in the neck. This interface is worthy of further scrutiny, and PAC/NAO are well placed to do so.

But you wouldn’t know much about any of these details from the grandstanding comments from Ms Hodge issued alongside the report. Instead of sober analysis, we get a thinly-veiled rant which appears to lean rather too much on playing to the gallery. This is important, as it is these comments which have flown immediately into the press and, as a consequence, influenced public perception. Most heinous of these misapprehensions is the suggestion that ‘£50bn would be spent on rail investment in these constrained times’.

This is precisely the opposite of what the government proposes: the whole point of HS2 is to deliver long-term investment over numerous economic cycles, both constrained and otherwise. A funding stream of approximately £1.5bn per annum is already in place from the Crossrail programme; and indeed if Ms Hodge believes spending on transport infrastructure in a downturn is bad thing, where are her headline-grabbing quotes about the £21bn spent on main line rail projects in London in the 2008-18 period?

The government is belatedly adapting its message on HS2 to make more of the rail capacity benefits, which this blog has long viewed as the strongest argument with which to advocate the project. Clearly the government and those it has employed to disseminate this message have struggled to make headway in the wider media, but that shouldn’t excuse a serious failure to listen on the part of Ms Hodge and her colleagues. PAC recommends: ‘The government should publish detailed evidence why it considers High Speed 2 to be the best option for increasing rail capacity into London’ (my italics).

This is a remarkably inaccurate suggestion: HS2 is not purely a ‘London rail capacity project’, since – as I’ve just mentioned – we’ve got quite a few of those taking priority already, although it will benefit commuters using routes from the north into the capital. But equally pressing are capacity constraints elsewhere, notably south of Manchester, in the West Midlands and on key freight axes, all mentioned by this blog passim.

Lastly, we have the sadly predictable monomania about ‘the iPad businessman’. I’m happy to be corrected of course, but as far as I am aware there is no line in the HS2 Economic Appraisal that states ‘the government does not believe that people work on trains’. According to PAC’s report, the benefits of faster journeys to business travellers are based on a series of ‘simplified assumptions’ in line with international practice. PAC dismisses these assumptions as ‘absurd’ given advances in digital technology.

But PAC offers little or no explanation for its own rather extreme view. As transport consultancy SKM Colin Buchanan pointed out recently, it is surely not credible to suggest that working on trains is a particularly new phenomenon. Indeed, it seems a rash assumption indeed that the challenges of connecting to wi-fi, getting a data signal, or charging electronic devices have not some extent suppressed the supposed advantages of working onboard. That’s before we assess external factors such as pricing or overcrowding.

Of course, it is likely that these issues will have been largely resolved by the time HS2 opens in 2032-33, which suggests that updating the survey work now in this area would be of largely academic interest. More worrying on this occasion however is Ms Hodge’s assertion during a PAC hearing that she personally finds the train an ideal place to work. Bully for her, I say, but let us not pretend this is a sound basis for the deliberations of a parliamentary spending committee.

The often-emotive assertions attached to HS2’s status as a ‘high speed’ railway tend rather to overlook the reality that a conventional railway confers almost no benefit, not least because its capacity-enhancing effects would be much reduced, as would its ability to take share from domestic aviation on longer routes (HS2 Ltd estimates that 33% of all Anglo-Scottish journeys on HS2 would transfer from air). Nor is there any evidence to suggest that the long-established correlation between faster journeys and higher revenue is broken.

Both PAC and DfT should reconsider the importance attached to the issue of working on trains, lest we find ourselves endorsing a position where passengers ride trains purely to get some work done. A desire to know how often each passenger toggles between corporate and personal Twitter feeds cannot be allowed to stand in the way of the provision of international-standard transport infrastructure. If it does, PAC, and in particular its chairman, will be required to share some of the responsibility.
1. See Railway Gazette International, September 2012, pp54-56.